May 22 (Bloomberg) -- Oil-tanker owners will struggle to
retain crews and maintain ships after losing the most money in
four decades, according to the industry’s biggest trade group.

The problems won’t ease any time soon because some vessel
rates may take as long as four years to rebound, said Katharina
Stanzel, the managing director of the International Association
of Independent Tanker Owners, or Intertanko. Its members operate
more than half of the world’s tankers by capacity.

Owners lost about $27 billion since 2009 and rates for the
largest vessels may only recover by 2017, according to
Intertanko. Daily rates for the biggest carriers slid 68 percent
over the past year because of a glut of capacity, figures from
London-based Clarkson Plc, the largest shipbroker, show.

“The biggest risk I see is that we will have nobody left
to actually make the deliveries,” Stanzel said by e-mail May
17. Industry conditions were “probably equally dramatic” when
rates plunged in 1973-74, she said.

Earnings for very large crude carriers, each able to hold 2
million barrels of oil, retreated to $10,674 a day, according to
Clarkson’s figures. That’s less than half of the $24,200 that
Frontline Ltd., the tanker operator led by shipping billionaire
John Fredriksen, said in February its VLCCs need to break even.

General Maritime Corp., the New York-based tanker operator,
filed for bankruptcy protection in November 2011 and was
followed a year later by Overseas Shipholding Group Inc., the
biggest U.S. tanker owner. General Maritime emerged from
bankruptcy protection in May 2012.

World Fleet

Intertanko, which was formed in 1970, promotes goals of
zero pollution and fatalities, Stanzel said. To remain a member,
companies must meet various safety criteria. There is a
possibility that non-member operators will ship an increasing
amount of oil, increasing the risk of “incidents and
accidents” including spills, she said.

Intertanko members operate vessels with a combined capacity
of about 283.5 million deadweight tons, according to the group.
That equates to about 58 percent of the global fleet of tankers
bigger than 10,000 tons.

Owners are contending with oil demand that will advance 0.9
percent this year, the least since 2011, according to the
International Energy Agency, an adviser to 28 developed nations.
The tanker fleet’s capacity will increase 7.8 percent in that
period, Clarkson data show.

So Negative

“What makes this situation particularly challenging is the
outlook is so negative,” Malcolm Willingale, a project manager
for Intertanko, said in an interview May 10. The surplus and
slowing demand growth may hold rates down until 2017, he said.

Oil companies are shipping more cargoes on single-voyage
charters, which earn less for tanker owners. The proportion of
ships operating in the so-called spot market expanded to about
59 percent of total trade last year from 51 percent in 2010,
according to Intertanko.

Ships on five-year charters are earning about $26,000 a
day, while those in the spot market are getting about 60 percent
less, according to Clarkson data.

Forward freight agreements, swaps used to bet on future
shipping rates, anticipate VLCCs will earn $15,000 a day on
average in 2015 for carrying Middle East oil to Asia, according
to figures from Marex Spectron Group.